The Myth of Unsustainable Health Funding

"The idea that New Zealand spends
too much on public health care and cannot sustain the
current level of funding is both wrong and damaging," says
Ian Powell, Executive Director of the Association of
Salaried Medical Specialists (ASMS).

"The prevailing
thinking would have us believe New Zealand's health system
is an insatiable beast draining the Government's coffers
dry, but the evidence shows something quite different.
Health funding has actually been falling as a proportion of
GDP over recent years."The ASMS has examined public
health funding in New Zealand over the years, along with the
assumptions about affordability and comparison which
underpin the Government's decisions about health
funding.

An ASMS report published today, The myth of
unsustainable health funding and what Treasury figures
actually show, looks at the case for each of these
assumptions and challenges the distorted thinking they are
based on.

"The Government needs to act on the facts,
rather than the various assertions that are made about
health care funding," says Mr Powell.

"Public hospitals
are trying to do more with less in an environment based on
the erroneous belief that New Zealand's current level of
health funding cannot continue, let alone increase. That
has real consequences for people who need treatment but
can't get it because the health sector isn't resourced
properly, both in terms of funding of services and funding
for the workforce delivering those services.

"A good
starting point would be to invest more in the hospital
specialist workforce."

The main claims made about
health funding in this country are:

.
Spending on public health has been increasing faster than
the national income for most of the last 60 years.

.
Health is the second-largest item of government spending and
is growing as a proportion of both government and the
economy.

The reality check:

Health funding has actually been falling as a proportion of
GDP over recent years, from 6.56% in the 2009/10 year to an
estimated 5.99% in this year's Budget.. Between
2009/10 and 2014/15, health operational funding increased by
$1.8 billion, while over the same period nominal GDP will
have increased by about $48 billion.. Treasury has
forecast further real falls in health funding of almost half
a billion dollars per year, cumulative, between now and
2018.. International evidence suggests that
spending less on health can be a false economy, resulting in
substantial hidden costs to the health system as the need
for health care does not go away but the cost is transferred
either to other parts of the health system or to patients
themselves.

"Treasury
forecasts are for government spending on health under this
government to contract significantly in real terms over the
next four years," says Dr Rosenberg.

"Falling government
spending does not reduce health needs: it just shifts the
personal and financial cost to individuals who may not be
able to afford it. It's time we discussed the issues of
health funding from a New Zealand-wide social and economic
viewpoint, not just as a fiscal problem."

Ian Powell says
health decision-makers need to rely on evidence, rather than
claims, when deciding the level of funding for New Zealand's
public health system."This is too important to get
wrong," he says.

Professor Martin McKee from the London
School of Hygiene & Tropical Medicine will present the
argument for investment in health systems during a special
ASMS conference in Wellington next Tuesday. Media are
welcome to attend the conference.Ian
Powell

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